ACA Premium Tax Credits After 2025: What Expiration Means for 2026 Coverage and Costs

2026 Is the First Year Without Enhanced ACA Subsidies. Here’s What That Means.

For many families who buy their own health insurance, 2026 is the first full coverage year without the enhanced Affordable Care Act (ACA) premium tax credits that were expanded during the COVID-19 pandemic. Those higher subsidy levels expired on December 31, 2025.

The ACA itself has not ended. Marketplace plans are still available. Protections for pre-existing conditions remain in place. Medicaid and the Children’s Health Insurance Program (CHIP) are still operating. But the financial help many households relied on is now calculated under the ACA’s original formula.

For some people, especially middle-income households and adults in their 50s and early 60s, that change can mean significantly higher monthly premiums in 2026. How much more depends on income, age, family size, and where you live.

How ACA Premium Tax Credits Work

Premium tax credits are federal subsidies that lower the monthly cost of Marketplace health insurance. According to HealthCare.gov, the amount is based on:

Your household income
Your household size
The cost of a “benchmark” Silver plan in your area
Your income as a percentage of the federal poverty level (FPL)

Under the standard ACA formula, you are expected to pay a certain percentage of your income toward the benchmark Silver plan. The tax credit covers the difference between that expected contribution and the actual premium.

Before 2021, people with incomes above 400% of the federal poverty level generally did not qualify for subsidies at all. During the pandemic, Congress temporarily expanded subsidies so that no one buying a Marketplace plan had to pay more than 8.5% of income for the benchmark plan, even if their income was above 400% FPL.

Those enhanced rules expired at the end of 2025. For 2026 coverage, subsidy eligibility has returned to the original structure described by the Centers for Medicare & Medicaid Services (CMS).

What Changed After December 31, 2025

The key changes for 2026 are:

The 400% FPL “subsidy cliff” is back. Households above that income level may no longer qualify for premium tax credits.
Expected contribution percentages are higher for many income levels compared with the enhanced period.
Older adults, who face higher age-rated premiums, may see larger dollar increases if they lose eligibility for subsidies.

Nonpartisan analysis from KFF and the Commonwealth Fund suggests that, absent additional federal action, millions of enrollees could see higher net premiums in 2026. These projections are based on modeling assumptions about income distribution, plan pricing, and consumer behavior. Actual outcomes will vary by state and by individual circumstances.

Importantly, these are estimates—not guarantees of coverage loss. Some people may switch plans, adjust income reporting, or newly qualify for Medicaid or CHIP, depending on their situation.

Who Is Most Affected?

While costs will vary widely, several groups are more likely to feel the impact:

Middle-Income Families

Households just above 400% of the federal poverty level are once again at risk of losing subsidy eligibility entirely. For a family of four, that threshold depends on the annual poverty guidelines and household size. Crossing it by even a small amount can mean losing all premium tax credits.

Adults Ages 50–64

Insurers can charge older adults up to three times more than younger adults under ACA rules. During the enhanced subsidy period, tax credits often offset those higher premiums. Without the enhanced cap, near-retirees who are not yet eligible for Medicare may see especially large premium increases.

Self-Employed Workers and Gig Workers

People who buy coverage on their own—contractors, small business owners, and freelancers—are more exposed to subsidy changes because they do not have employer-sponsored insurance as a fallback.

Rural Residents and High-Premium Areas

In areas with limited insurer competition, benchmark premiums can be higher. When subsidies shrink or disappear, those higher base premiums translate directly into higher out-of-pocket monthly costs.

What Protections Still Remain

Even without the enhanced subsidies, the core ACA rules remain in place:

Guaranteed issue: Insurers must cover people with pre-existing conditions.
Essential health benefits: Plans must cover services such as hospitalization, prescription drugs, maternity care, mental health treatment, and preventive services.
No annual or lifetime dollar limits on essential benefits.
Dependent coverage to age 26.

Medicaid expansion continues in participating states, though not all states have expanded eligibility. In expansion states, adults with incomes up to 138% of the federal poverty level may qualify for Medicaid. CHIP remains available nationwide for many children in families with incomes too high for Medicaid but too low for affordable private coverage.

If your income drops during the year, you may move from Marketplace coverage into Medicaid eligibility, depending on your state’s rules. Likewise, if your income rises, you may shift from Medicaid to Marketplace coverage. Reporting income changes promptly to your Marketplace or state agency is essential to avoid unexpected tax bills or coverage gaps.

What This May Mean for Coverage Rates

KFF and Commonwealth Fund analyses have projected that ending enhanced subsidies could increase the number of uninsured people nationwide. These projections are based on economic modeling and past enrollment patterns, not on finalized 2026 enrollment data.

Researchers generally note that affordability is closely tied to enrollment. When net premiums rise, some healthy individuals may drop coverage, which can affect overall risk pools and pricing. However, the extent of these effects will depend on state policies, insurer participation, and consumer response.

It is also possible that some states may adopt additional affordability measures, such as state-funded subsidies or reinsurance programs. Those state-level variations will matter.

What Households Can Do Now

If you buy coverage through the Marketplace, there are practical steps you can take:

Update your income information. Even small changes in projected annual income can affect subsidy eligibility.
Shop carefully during open enrollment. The lowest-premium plan may not offer the best value if deductibles and out-of-pocket maximums are high.
Compare Silver plans closely. Cost-sharing reductions (for eligible lower-income enrollees) only apply to Silver plans.
Check Medicaid and CHIP eligibility. If your income has fallen, you or your children may qualify.
Understand your out-of-pocket maximum. Premiums are only part of total cost; deductibles and copays matter too.
Consider how age and household changes affect eligibility. Marriage, divorce, job changes, or adding a dependent can trigger a special enrollment period.

If you are nearing age 65, planning ahead for the transition to Medicare can also help prevent coverage gaps.

What Remains Uncertain

Future federal or state policy changes could alter subsidy structures again. Congress could revisit subsidy levels, or states could implement their own supplemental programs. Insurer pricing decisions and economic conditions will also influence 2026 premiums.

For now, the most important point is this: the ACA framework remains in place, but financial help is less generous than it was during the enhanced subsidy period.

The Bottom Line

Some households—especially middle-income families and older adults buying their own coverage—may pay more for health insurance in 2026 than they did in recent years. Others may see smaller changes, depending on income and location.

The protections that prevent denial for pre-existing conditions and require coverage of essential health benefits are still intact. Medicaid and CHIP remain critical safety nets.

In a year of changing subsidy rules, reviewing your options carefully—and updating your income information—can make a meaningful difference in what you pay and the coverage you receive.

Sources

This article is for general informational purposes only and is not medical advice. Research findings can be early, limited, or subject to change as new evidence emerges. For personal guidance, diagnosis, or treatment, consult a licensed clinician. For current outbreak or public health guidance, follow your local health department, the CDC, or another relevant public health authority.